Monday, February 4, 2013

100,000 Uninsured Rides and Counting: Undercover at Lyft and Sidecar

Lyft (photo shows phone salespeople recruiting drivers at Lyft headquarters) and Sidecar are venture capital startups that advertise themselves as car-pooling services that use smart-phone apps to connect people who need rides with drivers in the community “who have extra space in their cars.”Both companies claim to do intensive evaluations of drivers, including criminal background checks and thorough inspections of the vehicles that provide transportation services through their apps. They also tell their drivers that their cars "do not need to be covered by commercial liability insurance.”

I decided to check out their hype because I’m the ideal person to do so. I’ve been an insurance underwriter, a driving instructor, a blogger, and I’ve logged over a million miles as a cab driver. My research included talking to representatives from the top ten rated insurance companies, interviewing people who have been Lyft or Sidecar drivers or customers, and applying for a driving position at the two companies. Both Lyft and Sidecar initially approved me but later changed their minds when I started asking them detailed questions about their contracts and insurance.

What I learned was that almost every claim that they make is either misleading or false. Their interviewing process is a joke. They don’t ask for social security numbers and they don’t fingerprint the applicants so they can’t be conducting criminal background checks. Nor do these companies make mechanical inspections of the cars. In the case of Sidecar, they don’t even look at the vehicle. Most importantly, insurance companies consider neither Lyft"s or Sidecar's ridesharing services so their cars are required to carry commercial insurance. Since most of their cars don’t, they are uninsured vehicles.

In reality then, Lyft and Sidecar are illegal transportation for hire services that use double-talk to exploit the underemployed, and subvert laws and regulations designed to protect drivers, passengers and the public. Furthermore, when drivers and passengers accept the terms of service necessary to download their apps, they waive their rights to sue Lyft or Sidecar in perpetuity. Their passengers also agree to come to the legal defense (at their own expense) of Lyft or sidecar if the companies are sued for negligence.If you were to be a car, what kind of car would you be and why?

I've had many careers in my life but my interviews at these companies marked the first times that I've ever applied for a job and not been asked what skills or experience qualified me to do the work.

Sidecar conducted an online video interview with me. The most profound question they asked was:

If you were to be a car, what kind of car would you be? And why?”

The other Sidecar questions were:

“Who are you and why would you make an awesome Sidecar community driver?”

“Where are some of your favorite places to hang out and why?”

“How did you hear about us?”

During a phone interview, Lyft representative Chris did ask me if I’d ever had a DUI or a criminal record. He then returned to in-depth community ridesharing form to finish up with:

“How would your friends describe your personality?”

“Do you smoke in your car?”

“For a more important question, who would you most want to ride in your car for ten minutes?”

Both companies did check to see if my driver’s license was valid and my auto insurance was up to date. They also looked at my vehicle ownership card. Neither company fingerprinted me or asked for my social security number - necessities for doing a criminal background check.

I had an “in person” interview at Lyft that lasted three minutes. There was no training session. An interviewer/inspector, who looked more like a fashionista then a mechanic, glanced at my car. She sat in the front seat to see if it was clean and made sure that the lights and turn signals worked before taking my photograph standing next to the car. She did not drive the car or ride in it, check the tires, check the VIN #, open the hood, look under the car or do any kind of mechanical inspection.

There was no “in person” interview at Sidecar. Instead, I attended Sidecar U for an hour and a half where most of the time was devoted to explaining how to use the app and noting the best times to drive. The fact that Sidecar was not liable for auto insurance was briefly mentioned and driving safely was encouraged. The instructor proudly told us that Sidecar now had over five hundred vehicles in San Francisco.

I was told to upload a photo (left) of my car to their website where they must have done the mechanical inspection because they certainly didn’t do so in person.

On the basis of these intensive interviews, I was approved along with three other divers at Lyft and with eighteen others at Sidecar.

Next: If it looks like a duck and walks like a duck, will it bark if you call it a dog? The art of double-talk and a look at Lyft's and Sidecar's insurance, or lack thereof.

One thing I like about you Athan is you go right to the heart of the matter.

I would've been a baby blue '57 Chevy convertible with a white top. That was the car that I wanted to buy when I was 15 but my mother refused to sign off on it because she rightly thought that I would race around trying to pick up girls. She insisted I buy a pea green 56 ford sedan with a top speed of 80. I forgave her when I turned 50.

It will come too late but the public will find out in due course why taxi regs. have evolved over the years to where they are now.The first thing that will happen is there will be an injury that the public will pay for because the driver will find him self uninsured. A similar thing happened to National Cab 20 years ago and caused them to file for bankruptcy. The insurance company in that case went bankrupt itself leaving National holding the bag. The injured parties ended up with legal bills and that was about it.No reflection intended on current management by the way. Outstanding job Ed. I think you may have missed your calling as an investigative reporter

Great work, Ed- the public needs to read your story, and the MTA needs to crack down on these "gypsy cabs". Clarification: is Lyft paying their drivers $22/hr? That is what one of my passengers told me the other day. He said the company keeps the "donation" and pays the driver $22/hr.

I am a Lyft driver and believe 90 percent of what you say here to be true. I'd like to add that I do believe the Lyft drivers are not getting the money due to them not through deliberate means but by pure ignorance and lack of basic business knowledge on behalf of those running Lyft.Lyft does not allow us to see any data that is used to create our daily/weekly reports.All rides are lumped together.Lyft's admin fees of 20% also apply to any and all tips we get.Is it not illegal in the state of California for a company to touch tips?Weeks after becoming a Lyft driver, Lyft decided that we were all "independent contractors".Not I nor any other driver I know of ever agreed to becoming a contractor.When drivers would ask about tax situations the questions were consistently ignored or diverted to non-existent tax personnel within Lyft.After being told driver's tax situations is that we are "self-reporting" Lyft decided to create 1099's.The only "contract" that I agreed to was the $22+ per hour average pay.$22+ per hour is incorrect. The average is 15 to 18. I'm sure that within one year there will be several class action lawsuits filed against Lyft.It will also be interesting to see what that IRS has to say about all of this.The only inspection of my vehicle was to see if it met Lyft's standards of cleanliness.There is no training, safety or otherwise.Lyft just throws its drivers onto the streets much like an ignorant parent throws its child into a swimming pool expecting it to learn how to swim via self preservation and animal instinct.

In my opinion, all cab drivers "dig their own graves" by not offering rides to the outer sunset or Richmond on a busy night. I have been kick out by a cab driver because he saw a person who is going to the airport. I call the Cab company and filed a complaint and never got a responds back. Now, I use uber taxi and tip more than 20% because I know that and fare under 10 dollars, the cab driver is losing money. Nonetheless, i will never use lyft or sidecar because I don't trust these drivers. I was an auditor and had travel to many cites in U.S--in some cities, cab drivers had to take a customer services course before they can drive. if SF cab companies are able to plan accordingly and take a chapter from other cites, the cab industry will improve. One cab driver had told me that some of the larger companies like yellow are so freaking unethical where drivers need to tip everyone in order to get their cab on time...... what a freaking mass. And the hotel doorman also what a tip from the driver if is an SFO ride. WHAT a fucking joke. Now recently, I have witness cab drivers fighting for fares, and going 90 miles so that they can do their "shorts" some don't even take credit cards, or that use a freaking old paper receipt to get my credit card info, I just wonder where is my credit card info going to......... in brief, due to the my experiences in the pass, I will only use uber taxis, i'll tip more because i know the driver is paying his overhead and know the streets. However, in some instances, if the driver0 is not friendly or always talking on the phone while driving. I will TAKE A PICTURE OF THE CAB AND THE DRIVER -- if i have a bad day, i'll post it on you tube. i always wonder if these cab drivers are talking about business related issues or something else. I meet some very smart drivers' that are in grad school or trying to open their own business--these driver are the best!!!! I often offer them to take me back to SFO the next day after my meetings are over. Will, going forward, I hope that all cab drives can be a nicer.

Sounds like you don't drive much as the average obviously increases with the more you drive. The more you drive the more you make. You're ignorant if you thought you were actually being offered employment by Lyft. And also, I take it, you are no longer a Lyft driver as you obviously have so many problems with it?

This is consistent with our findings with pi stings on the drivers in one of the companies. If any public agency in California did it job they would find out this information is true. Managementless transportation is a really bad idea.

The short answer as I understand it. Lyft has a "Power Driver Bonus" program, where Lyft will reward drivers a percentage of commissions paid to Lyft back to the driver contingent on two things. 1) Minimum of 15 hours driven in a week (Lyft weeks begin Mondays, 5:00 AM and end the following Monday, 5:00 AM) and 2) Maintain a minimum 90% (or 4.5 driver rating) acceptance rate in the same period. Lyft"s commission is 20% of the total ride earnings (except tips). That said, drivers that have driven 15 to 30 hours in any given week are eligible for a 5% weekly bonus. 30 to 40 hours, 10% bonus. If a driver drives over 40 hours but under 50 hours they are eligible for a 15% bonus. Over 50 hours driven in any given week, the bonus is 20%, thus the more a driver drives in any given week, the more said driver will earn in the form of a bonus from lyft. I hope this helped, Best

The rules and regulations set forth in the Austin City Code are there to ensure public safety. They include insurance requirements, vehicle inspections and driver screening. These rogue applications offer none of these protections. I personally hope that the police and the city transportation department officials take a hard stand against these services who are blatantly and publicly breaking the law.Make no mistake, this is not people car-pooling and sharing a ride because they are going your way! These are drivers who have signed up on-line to make "up to $22 per hour" logging into this system and driving around and picking people up for money (taxi service). There is nothing altruistic or "green" about this company. It is a "for profit" transportation company that uses unlicensed, under insured and un-screened drivers.

Wow I'm seriously reconsidering using the service any more. Now that I read this I'm wondering do Lyft drivers even get drug tested ever, I know on their website they state zero tolerance and people can report your driver. However is there a drug test administered.

Good for them. They didn't do until I wrote about. But the SS# is really nothing. The only way to actually tell if a person is who he or she says they are is fingerprinting which Sidecar, Lyft and now Uber refuse to do for a variety of ridiculous reasons.

I work for Lyft. I make on average over 20 an hour, I was informed that I needed to have my own insurance, but that they had extra liability insurance, if necessary. They took my SSN, and took well over 3 weeks to complete my background check, which is very real, and I received a copy of. No, drivers aren't specifically drug tested, though I couldn't tell you if the last cab I got into had a drug free driver either. Lyft has the great rating system, allowing passengers and drivers to control who they get/give rides to. I wish tazes were going to be easier to report, but alas, not everything in life is perfect. As someone who needed to make money, and now is, I am happy to be working for Lyft, and have yet to have a single passenger complain about the service as a whole. Just my 2 cents...

All personal auto policies have business use exclusions in them. I have heard stories of some agents telling people that this is a covered activity which is patently false. Of course, nobody is going to believe those of us who know how to read a contract until these folks are sued. Apparently, some of these companies are telling people not to worry and that their parent company has a $1 Million liability policy that will kick in to protect them, which again is not entirely the case. The individual drivers are not being named as additional insureds and their coverage when denied will be entirely insufficient to meet even the minimum standards of any alleged liability policy that these companies own. This is dangerous and exploitive of people who are trying to earn a living. I wish they would do this the right way.

You gotta wonder how "awesome" a lyft driver and car will be after they've been on the road for as many miles and hours as cab logs in, say, a year. After the back seat has been puked in a few times, etc.

Taxis have been regulated since the Hackney Carriage Act of 1635 in London. The purpose of regulation is not profit, it is to have standards and recourse. If people would just call 311 and report the asshat cabbies instead of whining we would have a much better crop of cabbies. Lyft, and Sidecar are violating at least 15 laws in just SF and LA. Breaking the law with illegal competition is not going to help the industry, it will only hurt it.

My ex-husband was a treaty insurance broker who I learned a lot from when I went to London for our honeymoon to meet his parents and fellow brokers. Be very careful if you are a passenger because private car insurance does not allow the vehicle to be used commercially and they can if they wish deny the policy if a claim is filed if they discover you were paying for your ride and now were in a very serious auto accident and needing millions of dollars of medical care along with loss of earnings because you now can no longer work for the rest of your life. I became disabled from a car accident along with a surgeon who also did not wish to write in the medical records all the mistakes and complications that happened during the surgery that I suffered when I woke up a day later unable to move my leg. This is my advice if you are a passenger is to make sure your own auto insurance coverage would protect you if you are a passenger in another persons vehicle for medical and loss of wages. Talk to your insurance agent to get an umbrella policy on being a passenger in another vehicle. I agree with the person that when a big accident happens the company will disavow any responsibility because they make everyone a "independent contractor". Therefore, the passenger can file suit against the driver for damages if they are at fault in an accident in civil court. I do not trust people to drive correctly and I agree this company is using Capitalism to make money along with people who drive receiving 1099's because most I found after working in Texas do not file taxes and pocket the money. The odds on a tax audit for less than $50,000 a year is less than .01%. A person that needs to drive to make money more than likely did not have the money to maintain the vehicle and maybe repairs that are related to safety do not happen. Young people do not think that anything really bad can happen but it does.My life was ruined from a driver that rear-ended me because she was fighting with her kids in the back seat and hit my stopped vehicle at 60 m.p.h. I would have been dead if I had not had my seat belt on. Please think of all the bad things that could happen if you are a driver for these companies and if you are a passenger and investigate all possible outcomes because the rest of your financial and healthful life may depend upon what decision you make. Do not be penny wise and pound foolish.

I have the money to maintain my car, i love my car, its my baby. I'm no broke joke. I drive because working a desk job is depressing and i got a degree in international business so i have over a decade of proof that working for other people is no fun, working for yourself is 100 times more rewarding. And I pay my taxes, don't think that those breaking the rules dont get caught, they do. I'm sorry that you had such a hard life, but i follow speed limits and fully stop at all stop signs. I deeply care about my riders. I work for both Lyft and Side Car...full time.

If the uninsured ride wasn't enough to scare people, the hiring process sure would. I know there's a huge debacle about how in-depth employee background checks should go, but when you're offering a service that puts the safety of customers in another person's hands, one would like to think that a company has done all the necessary screenings that would ensure that a certain ride wouldn't be the last.

I started with Lyft 3 months ago. I was told there would be a background check, and I met a mentor who looked over the car and more or less said away you go. Since I have a clean record and a clean license and a good knowledge of the city, I drove part time and found it a great way to earn extra money at weekends and earned the $35 average. Keep in mind you have gas ($25) and wear and tear and taxes at the end of year. I found passengers to be nice and appreciating of the service. There is very little tipping as far as I can see and to be honest cab drivers were pretty abusive when they saw the pink moustache, even swerving to intimidate at times. I waved back with one finger and said to hell with them, its their own fault that this is the situation. 90% of the passengers don't want to ride in a taxi, because of rudeness, uncleanliness and fear of been taken advantage of. That's why these rideshares are so popular. But as much as it is fun, the bottom line is that we are not cab drivers and we are at risk of losing a lot. As much as I liked the lyft personnel I think this is a ticking time bomb. If there is a serious accident, and it makes the news, it will all end in tears. I stopped driving because of the risk. I have seen where drivers have got into minor accidents and had other problems and had trouble contacting support from lyft which is just not right. I am surprised there hasn't been a serious accident already, given the fact the rideshares are operating almost nationwide. I'm sure the taxi companies would love to see something bad happen also and that's not right either. This was a good investigative report, but I do believe taxi drivers should wake up and give better service. Yes it was fun but we are not insured to carry passengers without going commercial

i drive a taxi in Chicago and have for some time. I also take taxis as a passenger and the quality of the driver and his attitude and behavior varies from driver to driver. Some taxi drivers are ignorant and ignore the passenger the whole ride, dont say hello or acknowledge that they understood the destination. Some talk on the phone the whole way. But some drivers dont talk on the phone, do chit chat w the passenger, have good personal hygiene, know what theyre doing, etc. I personally dont talk on the phone when i drive. So a lot is up to the driver. HOwever what most passengers dont know is that cab drivers as a group are basically abused, ignored and expolited by the city governments and the big cab companies. Conditions are pretty bad for cabbies in Chgo and from what I hear around the country. So all these peopole who like to blame cab drivers dont understand whats going on. If workers are treated well they are inclined to feel better on the job, and treat customers better. On the other hand, workers who feel and are ignored abused and exploited by their employer feel agrravated and abused, disrespected and irate on the job and tend to provide bad service. The passengers who complain about driver behavior are only seeing the surface. Shit rolls downhill. Drivers may be ignorant and abusive to passengers but that is because they are ignored and abused by the cab company and the city. Passengers are oblivious to this. If you want better taxi service in your city, be proactive in working for justice for taxi drivers. If you want good service from abused, underpaid, stolen-from cab drivers then you are supporting slavery and are part of the problem.

I don’t think I want to know firsthand about the actual quality of their drivers. Using such unrelated questions that don’t really focus on the important qualities they should look for in a driver is laughable. And not even doing any background checks, like license validity or screening public records, shows how much of a joke it is. I hope people are made aware of these things earlier. As for me, I’d stick to hailing cabs. I’d probably get the same result.

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Why should I post it? Lyft has enough venture capital to afford its own misleading advertising, John.

"Lyft has always led the ridesharing industry in safety and insurance innovation." What a joke? What Lyft and the rest do is not ridesharing but illegal taxi driving. Lyft calls it "ridesharing" in order to avoid city, state and federal regulations including carrying the proper insurance which would be full commercial livery coverage 24/7. Thus "leading the ridesharing industry in safety" is a non-sequitor. The industry is inherently unsafe.

The $1 million coverage while matched with a passenger is nice but it's a standard required by law in California and is less than the $2 million policy carried by Desoto Cab in San Francisco.

$50,000 - $100,000 is $950,000 less than a taxicab carries while its drivers are looking for customers. This is arguably the most dangerous time for a taxi driver (legal or otherwise) because said driver is more likely to be looking for business than concentrating on his or her driving. It was during this period of time that the Uber driver killed Sophia Liu last New Years Eve. The bills for this accident have already gone over $200,000 with no end in sight.

This "contingent Liability" coverage appear to only be good if the driver's primary insurance doesn't pay and is way too low to protect the driver or the public. It's primary purpose is to make Lyft look like it's providing insurance when it's real purpose is to cut down on Lyft's insurance bills. Otherwise there is no logic for it. The public has the same exposure whether the driver has a passenger or not.

The Contingent collision coverage is interesting. Apparently tnc drivers are getting smarter and realize that their personal insurance won't cover their cars for collision while they are working for Lyft. This is interesting because it shows that Lyft is more interested in the safety of the driver's cars than they are the drivers or the public. I mean, this is a policy that provides the same $50,000 "contingent" insurance for injuries to a car or a person. $50,000 cars are rare but injuries to a person can cost millions.

John Zimmer has long been claiming that he has cutting edge insurance. There is certainly nothing else like this anywhere in the transportation industry.

Your company is a joke, I applied to be a Lyft driver and have yet to hear back. I provided all my data, filled out to do the background check, and went on the drive with your "mentor". First of all, let me explain why I wanted to drive part time.... I am going to be homeless at the end of this month. Now I have no prospect of making any extra cash, no prospect of saving what I have in order to avoid homelessness and now I will be unable to attain any other job since I will be homeless. Second, my "mentor" experience; she pulled an eyebrow off my forehead, which I found totally invasive of my personal space, then she tells me that "she was just trying to help me" well I am a 50 yo woman going through menopause and yes there will be some eyebrows that grow out of place. So I feel that this interaction would definitely have basis for a lawsuit as I am being judged by my age and appearance, which actually was not bad at all. It is funny however, that when I gave her the test drive, after she left my car smelled like a sewer.Third, I have placed a number of complaints through the only way you can contact your company, email, and just get a machine operated response and no follow up of any of my questions. This includes my application and where I am in the process. Fourth, I post on your lyft page and my comments are deleted and my posts completely disappear. Therefore you are violating my right to speak and be heard.Lastly, I tried to contact your "mentor" multiple times, after which she tells me that I should upload my insurance info, but there is nowhere to do this. She proceeds to tell me after I try without success to contact anyone, "that she is just a mentor and that she has nothing to do with the process of hiring", "that maybe it has to do with my background check or the DMV" and "that maybe I should place the complaint that I mentioned I would". I have nothing to worry about my background check, as I have gone through many of them in the past two years without any issues, I have nothing at the DMV and yes I will be calling the attorney general's office and a lawyer as I feel that this whole process has been nothing but discriminatory to say the least.

About Me

Crocker Amazon is the nom de blog of Ed Healy. I started this blog in 2009 when Mayor Gavin Newsom tried to steal taxi driver medallion and use them to pay off the San Francisco's 600 million debt. I have used this blog to help inform the public and the people who make decisions about the various issues that arose from this including the Taxi Reform, protests and other changes that followed.
I've been driving a cab for 25 years in San Francisco. You can contact me at: amazincrocker@gmail.com
I've started a new blog devoted purely to cab Stories at: http://phantomcabstories.blogspot.com/
Comments are welcome but please identify yourself.